Friday, July 30, 2010

Attorney for Wyly brothers charged in huge fraud

Billionaire Brothers Samuel and Charles Wyly Charged With $550 Million Fraud

Billionaire brothers Samuel Wyly (pictured) and Charles Wyly were charged Thursday by the Securities & Exchange Commission with orchestrating a 13-year-long securities fraud that reaped them $550 million in undisclosed gains that were hidden in a series of transactions in the Isle of Man and the Cayman Islands tax havens.

The SEC alleges that the brothers created an "elaborate sham system of trusts and subsidiary companies" to sell more than $750 million worth of stock in four public companies for which they were corporate directors. The brothers also allegedly committed an insider-trading violation connected to one of the companies for an unlawful gain of more than $31.7 million.

According to the SEC, the shares that the Wylys sold in the alleged scheme were of Michaels Stores, Sterling Software, Sterling Commerce, and Scottish Annuity & Life Holdings. The SEC also charged the Wyly's attorney, Michael C. French, and their stockbroker, Louis J. Schaufele III. French was on the board of directors at three of the companies...

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